We need once again to recapture a continental vision, so that Europe could once again be responsible for its own destiny and could work to overcome the divisions that have once again come to haunt us.

       From the bustling pavilions to the packed halls, an observer at the recently concluded nineteenth St Petersburg International Economic Forum (SPIEF), 18-20 June, would be hard put to agree with Barack Obama’s notorious statement in his State of the Union address of 20 January 2015 that the Russian economy was ‘in tatters’. Overall attendance was up by about a thousand from last year, to reach nearly 8,000 people. More senior American executives attended. Although the US administration still made clear its disapproval, it did not engage in the arm-twisting and threats of 2014. Many of the big names of the western business community were represented, including leading representatives of the oil and gas sectors, as well as financial services. What was formerly known as Ernst & Young, now rebranded as the anodyne ‘EY’, hired a prominent pavilion, as did some of the other leading accountancy firms.

       The head of BP, Robert Dudley shared a platform with Igor Sechin, the head of Rosneft, as the experts tried to anticipate the shape of the energy market of the future. Leading economists worried about fragility of the world economic order, especially in light of the Euro crisis and the possibility of a Greek or British exit, while Russian economists provided excoriating critiques of the failure to implement structural reform of the Russian economy. This was the essence of the comments by German Gref, the former economic and trade minister and now head of Sberbank, as well as by the former finance minister Alexei Kudrin. The strategy of import substitution may well be a necessary short-term response to western sanctions, but it cannot be a long-term strategy to create a competitive and dynamic economy. Russia was in danger of falling ever further behind in global terms, especially given the fantastic speed of China’s rise.

       The stormy and changeable weather over the Lenexpo exhibition site at the far end of Vasilyevsky Island was therefore reflected in the discussions. While the Russian economy is not in tatters, as Vladimir Putin pointed out at length in his keynote speech on 19 June, it is certainly facing some fundamental challenges. Speaking to a packed hall with perhaps some 2,000 people in attendance, including the western delegates and basically the whole of the Russian elite including not only ministers but also governors and heads of various agencies, Putin outlined the Russian strategy of resilience in the face of sanctions and relatively low oil prices. I happened to be sitting five places along from Ramzan Kadyrov, the leader of the Chechen Republic, and it struck me how the occasion was intended to send a message not only to the international business community, but also to act as an instrument of nation building.

       The whole Russian elite were brought together for such the set piece occasion, and each in their small way could feel part of a common endeavour. The assiduous attention with which Kadyrov listened to Putin’s speech symbolised the larger relationship between the leader and his people, including with what had once been a rebellious province. However tenuous the peace in the North Caucasus and enormous the challenges in regional development as a whole, some sort of stabilisation has been achieved in the Putin years. In itself this may not have resolved all the tensions and contradictions, but the greatest legacy of the Putin system may be that that it has created the framework for the resolution of historical problems if only some sort of stable evolutionary mechanism can be found that incorporates the achievements while overcoming the negatives.

       Two themes were particularly striking at the Forum. The first was the attention paid to various manifestations of ‘the East’. Numerous sessions were devoted to the development of the Eurasian Economic Union, which formally came into existence on 1 January and now encompasses five former Soviet states, but it was interesting that the discussion was now framed within the larger context of the China-backed Silk Road Economic Belt. This was the theme of one of the Valdai Club-sponsored roundtables, and it was reflected in Putin’s speech where he talked of the agreement that had been reached on combining the development of the two. The Chinese idea of ‘One Belt, One Road’ now encompasses the whole Marco Polo world. Several sessions discussed the question of the development of Russia’s own Far Eastern region, which now has a dedicated minister responsible for the issue. Several speakers stressed that Russia’s ‘pivot’ to Asia long preceded the sanctions and reflected a natural turn towards one of the most dynamically developing regions of the world.

       The major panel sponsored by the Valdai Club on ‘Economic Interdependence vs. Political Isolation’ highlighted the second main theme of the Forum. The paradox is obvious. How is that in a world that claims to be engaged in ever-closer economic integration none of the major political contradictions have been resolved. Instead, politics consistently trumps economics, as we see in the imposition of the sanctions against Russia. The postulate that economic interdependence in one way or another mitigates political tensions is once again demonstrated to be false. Political problems need political solutions. This is demonstrated in Russia’s relations with the European Union. Decades of economic interdependence, above all in the energy sphere, have recently only led to estrangement and alienation. The search for economic profit does not automatically translate into a stable international environment.

       It was precisely this point that was made by Fran？ois Fillon, who served as the prime minister of France between 2007 and 2012 and who is now a potential presidential candidate. He unabashedly defended the Gaullist vision of a united Europe from Lisbon to Vladivostok. On the panel with him was Grigory Marchenko, the two-time former governor of Kazakhstan’s Central Bank, the feisty former president of the Czech Republic, Vaclav Klaus, and Franco Frattini, the former Italian foreign minister. Frattini repeatedly noted that the decision to continue with the sanctions against Russia was taken on the eve of the forum by EU ambassadors and not even the foreign ministers. The EU decision had been effectively pre-empted by the G7 meeting (or ‘1 plus 6’ summit, as many termed it at the Forum) held earlier in the month, and it was left to the EU only to ratify the decision made elsewhere, while ensuring that dissident voices within the EU who had doubts about the wisdom of continuing with a pointless and ineffective strategy were suppressed.

       In short, as Fillon stressed, we need once again to recapture a continental vision, so that Europe could once again be responsible for its own destiny and could work to overcome the divisions that have once again come to haunt us. All main speakers stressed that the relationship with the US was ‘non-negotiable’, but all were aware of the tensions produced in Europe as the continent was hollowed out as it was pulled in Atlanticist and Asian directions. The centre cannot hold, and it will take a prophet in the De Gaulle mould to recreate a sense of European mission and purpose.

       Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.